Note: this is the second part of a three-part article on consumers’ views towards home buying and home ownership over a nine-year period. The first part is here >
With the dramatic swings in the housing market over the last decade, one would expect that changes in consumers’ attitudes toward the choice to purchase a home would have been equally as dramatic. From 2003 through 2011, NAR has produced the Market Pulse survey. The survey was uniquely positioned to measure changes like these over this nine-year period.
Not surprisingly, the sharp decline in home prices and turmoil in the housing markets had an impact on consumers’ perception of housing as a sound investment. From 2007 to 2011, there was a steady decline in the share of positive responses by survey participants, from 80% to 73%, when asked, “do you believe buying a home is a good financial decision, or not?” While the total share of positive responses declined, the share that was “not so strongly” positive grew. This trend might indicate some resiliency in the face of declining prices; perhaps a re-pinning of the perception of housing as a long-term investment versus a short-term one.
Despite the decline in perception of housing as a strong financial investment and the weak economy, respondents increasingly agreed that it was “a good time to buy” with 46% agreeing with that statement in 2007 and 57% by 2011. This trend was likely a result of the sharp drop in prices and increased affordability. In short, if you could afford to buy, it was a good time to do so.
Housing’s image was tarnished during the housing boom and bust, but for a variety of reasons. Next, we will explore some the factors that drove homebuyers’ purchase decision or created headwinds.